Halyburton v. . Greenlee and Flemming , 72 N.C. 316 ( 1875 )

At Fall Term, 1869, of Burke Superior Court Harshaw recovered a judgment against Thomas S. Greenlee and others, under which the land now sued for was sold as the property of Greenlee, a defendant in this action, and purchased by the plaintiff.

At Spring Term, 1869, of the Superior Court of McDowell, Flemming recovered a judgment against the said Greenlee, and under it, the same land was sold and purchased by Flemming, who permitted Greenlee to remain in possession as his tenant, and who, on the institution of this action, was allowed to defend as landlord. The sale at which Flemming purchased was after the sale at which plaintiff had purchased.

Greenlee of course could make no defence to the action of the plaintiff; but Flemming is entitled to set up any title he may here.

The question presented is, did the plaintiff acquire by his purchase in 1870, (as it may be assumed to have been although it is not expressly so stated) an absolute title to the land, independent of the lien of any judgment previously docketed, or was his title subject to such prior lien, so that it might be divested by a sale under it?

Before the enactment of the Code of Civil Procedure in 1868, there could have been no difficulty in answering this question. The sale by the sheriff under a junior execution passed to the purchaser all the title of the defendant in the execution, subject to equities existing against his estate, but clear of any liens existing by reason of any prior judgment, or execution of prior teste, or prior levy. The creditors were left to contest their respective priorities on the distribution of the fund. Woodly v.Gilliam, 64 N.C. 649. Probably this holding was necessary by reason of the fact, that an execution might issue from a Court of any county to any other county, and in as much as it made a lien from its teste, it was impossible for any purchaser at an execution sale to know whether he was buying an estate encumbered with the lien of a prior execution or not. He could not search the record of every Court in the State.

The Code of Civil Procedure enacted in 1868, made a material change. By this a judgment became a lien on the land of the defendant when it was docketed in the county in which the land was situated. Every bidder at a sale, might henceforth by reasonable care, know of every incumbrance by judgment upon the land, and must be held to buy subject to such incumbrance, of which he has, or must be held to have, notice. If therefore a sale of land is made under a junior docketed judgment, the purchaser buys in effect only an equity of redemption; that is, the title to the land upon paying off prior liens. If he neglects to pay off the prior liens, the prior judgment creditor may enforce his lien by a sale, just as a prior mortgage might do; and to give this sale any effect at all, it must pass the title in the land to the purchaser, subject of course to any prior lines, but paramount to the title of a former purchaser under a junior judgment.

We find this to be the law in other States which have laws similar to ours contained in C.C.P. As the question in its present aspect is somewhat new to us, I will quote a paragraph from Freeman on judgments, giving the construction of similar laws in some other States. Sec. 337, p. 326. "The sale of lands under execution, in no wise affects the lien of a prior judgment, nor does it necessitate any change in the proceeding required to make such lien effectual. Lathrop v. Brown, 23, Iowa 40. The holder of the elder lien, may at any time during the life of his lien, sell the land previously sold under a junior judgment. Upon the expiration of the statutory period of redemption, he may take out his deed, and thereby obtain title paramount to, and free from all sales and claims based upon junior liens. Rankin v.Scott, 12 Wheat 177; Littlefield v. Nichols, decided in S.C. of Cal. Nov. 14, 1871."

"The sale of lands under a junior judgment passes title subject to all prior liens. The money produced by such sale, therefore, cannot be applied to the satisfaction of such liens; but must to the extent of his debt, be given to the creditor under whose judgment it was realized. Bruce v. Vogle,38 Mo. 100."

There is no error in the judgment below.

PER CURIAM. Judgment of nonsuit against plaintiff according to case agreed.